Hoping to profit from the CDO expansion wave, Wilmington Trust Corp. has formed a subsidiary to operate most of its CDO business. The firm recruited from independent capital markets and risk management consultancy and hired its founder and CEO and president to lead the CDO administration effort at Wilmington.
The company will operate its CDO business through a new subsidiary called Wilmington Trust Conduit Services. Peter Vinella, founder and CEO of New York City-based PVA International, and Jeanette Jin, the company's president, have joined Wilmington Trust Conduit Services and will oversee its collateral administration services for CDOs. Wilmington Trust Corp. also hired eight people from PVA International to work at the new subsidiary. Vinella has suspended operations at PVA International, although Wilmington did not buy the company.
Wilmington's timing is no accident. The Bond Market Association reported that global CDO market issuance reached $177 billion since January, and some market players are expecting the market to do well over $200 billion in new issuance by yearend.
Also, the company hired Deborah McDonald as vice president for its corporate client services client development team. McDonald previously worked in corporate trust business development for other major banks, such as State Street Corp., U.S. Bank and Wachovia. She will work with Christophe Schroeder, an executive managing director and head of Wilmington Trust's European corporate client services.
"The growth of the CDO industry has created a significant opportunity for us," said Bill Farrell, executive vice president and head of Wilmington Trust's CCS business. "This expansion leverages our core services and demonstrates our commitment to meeting the administrative needs of CDO investors and issuers."
Wilmington Trust's full set of collateral administration, trustee, custodial and bookkeeping services for CDOs includes compliance monitoring and testing, payment calculations and disbursements, record maintenance, trade settlement as well as safekeeping of underlying assets.
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